Setanta To Go Bust Next Month?

Setanta has a month to save itself from ruin The long-term future of troubled sports broadcaster Setanta is likely to be decided within the next month, with the company facing collapse if it fails to renegotiate key contracts and bring in new investment. A new senior management team, installed to try to secure a future for the broadcaster, has until shortly after this month's FA Cup final – which it will broadcast live under the first year of its £150m contract with the FA – to do so. As revealed by the Guardian in February after Setanta lost half of the Premier League live matches it holds under its current deal, precipitating a crisis of confidence among its investors, the ambitious Irish pay-TV broadcaster has been battling on three interlinked fronts to survive. The new chairman, Sir Robin Miller, the former Emap chief executive, has been parachuted in to bring renewed focus to ongoing attempts to raise up to £100m from investors, restructure its existing contracts with rights holders to save money and agree on a revised business plan that could offer a viable way forward. Recent attention has focused on renegotiations with rights holders including the Premier League, FA, Scottish Premier League, golf's PGA Tour and Premier Rugby, which have assumed increased urgency as various key payments have loomed. Although its last £10m fee to the FA was late, it has been keen to stress that it has not defaulted on any payments. This week, it will meet Scottish Premier League officials to continue negotiations over a reduction in its existing contract and a new £125m deal due to start in 2010. Some of its rights holders, including the US PGA Tour, are believed to have been open to redrawing the terms of their contracts. But the Premier League and the FA, while happy to talk with Setanta, are insisting their deals are honoured in full. The next £10m instalment to the FA is due next month, with a payment of around £35m due to the Premier League immediately following the end of the season. Both governing bodies are convinced they could bring in replacement rights holders that would match the amount still owed by Setanta under their existing deals. The FA deal was structured so Setanta paid a significant sum up front, and ITV would be obliged to pick up England's friendlies at £2m apiece under the terms of the contract. But for both, the demise of Setanta would significantly reduce competition in the market next time they come to sell their rights. For the FA in particular, which replaced the BBC and Sky with Setanta and ITV under the new deal, it would raise awkward questions. The impact on the finances of other sports could be more dramatic.Setanta's business plan, already considered ambitious by some analysts, was thrown into disarray by its failure to retain the rights to 23 of the 46 Premier League matches per season that it shows under its existing £392m contract. An attempt to reduce the amount it pays by a fifth dramatically backfired as it narrowly missed out to BSkyB, which had already secured four of the six packages on offer from the start of the 2010-11 season. That left shareholders including Doughty Hanson, Goldman Sachs and Balderton Capital, which have collectively poured hundreds of millions of pounds into the company as it attempted to challenge Sky, with doubts over whether they could continue to support the business and reasonably expect to see a return. The company also looked for fresh external investors but, unsurprisingly given the current economic climate, is understood to have been left largely relying on its existing shareholders. Setanta executives continue to hope that a radically redrawn business plan, with a more modest rights investment burden and a renewed focus on its position on the Freeview platform, will persuade them to keep faith with the business and agree a new funding round. http://www.guardian.co.uk/media/2009/may/04/setanta-sports-rights-broadcasting Oh shit, this is bad. Setanta have been great for boxing in the UK, albeit lately boxing shows have dwindled (now we know why). This would be bad news, without them we might not have got Cotto-Margarito, Calzaghe-Kessler, Calzaghe-Hopkins, Calzaghe-Jones, Diaz-Marquez, Pavlik-Hopkins too many to mention, all for a small subscription fee (in accordance that some of these were US PPV's)